Abstract

Interdependencies between land use systems resemble a complex network connected through demand-supply relations disruption of which may evoke systemic risks affecting food, energy, water, and environment security worldwide if the systems are governed by incoherent policies. In this paper, we develop a stochastic partial equilibrium Global Biosphere Management Model enabling to analyze emergence and world-wide diversification of systemic risks implicitly characterized by the whole structure of the systems including input-output relations, exogenous threats, costs, market prices, technologies, security targets, risk measures, and feasible decisions of agents. While traditional deterministic scenario analysis under such implicitly generated risks produces sets of contradictory solutions with wrong policy implications, the stochastic GLOBIOM explicitly addresses the challenge deriving robust solutions which leave the systems better-off independently of scenarios. The model embeds stochastic optimization procedure with quantile-based security constraints, which is central for managing maladaptation and irreversibility of land use decisions. Evaluated robust portfolio of interdependent strategic (production allocation) and operational (storage and market) decisions maintain security requirements and decrease impacts of volatilities. With selected numerical results we demonstrate that robust storages and adaptive market adjustments hedge consumption and production risks, stabilize trade, and fulfill security requirements at lower costs, at the level of major regions as well as globally.